Will Trump’s shipping insurance plan work?

A massive maritime traffic jam in the Strait of Hormuz has paralyzed global trade, driven by a surge in "war insurance" premiums that have jumped from fractions of a percent to double-digit figures. Legitimate shippers now face daily insurance costs exceeding $1 million to transit the Persian Gulf, causing oil prices to spike above $100 a barrel. To combat this, the Trump administration is leveraging the U.S. International Development Finance Corporation (DFC) to provide $20 billion in reinsurance backstops. While experts like Rachel Siemba and Maximilian Hess note this could incentivize American insurers to return to the market, significant gaps remain regarding coverage for environmental disasters and crew safety. Ultimately, financial measures may prove insufficient if the U.S. military cannot neutralize asymmetrical threats like low-cost Iranian naval drones, which continue to render the waterway a high-risk "parking lot" for global energy supplies.